Data from Nansen show that the pace of withdrawals from cryptocurrency exchange Huobi slowed on Sunday, despite the recent drop in the price of Tron’s USDD stablecoin.
Huobi customers withdrew $60.9 million in 24 hours from the Singapore-based exchange on Friday.
Crypto mogul Justin Sun, who owns a majority stake in Huobi and founded Tron in 2017, deposited $100 million worth of stablecoins on Friday as a token of his trust. The deposit consisted of USD Coin (USDC) and Tether (USDT).
so @ Huobi Globalbelieves that the key to success in the cryptocurrency world is to “ignore the FUD and keep building.”
— HE Justin Sun 🌞🇬🇩🇩🇲🔥 (@justinsuntron) January 6, 2023
By noon on Sunday, the pace of withdrawals had slowed to just under $12 million in the past day, according to Nansen data. Weekly withdrawals fell from his $94.2 million on Friday to his $84 million.
Still, Tron’s USDD price, which should be pegged to the dollar price like other stablecoins, lost Between $0.983 and $0.972 over the past week. At the time of this writing, the price was $0.977 for him.
The latest example of the USDD losing its $1 peg came in October. coin geckoPreviously, the USDD dipped below $1 on June 12th of last year (the month after the Terra blockchain collapse) and didn’t fully recover until July 26th.
As of this writing, USDD’s market cap has fallen by $6.5 million to $709 million over the past 14 days. By comparison, Tether and USD Coin have market caps of $66.3 billion and $43.9 billion, respectively.
Unlike Tether and USD Coin, Tron’s USDD is an algorithmic stablecoin, relying on trading incentives and collateralized storage of crypto assets to maintain its price. Last year, when his UST, a Terra stablecoin, suddenly collapsed, wiped out $40 billion worth.
Tron and Huobi did not immediately respond to requests for comment.
Andrew Thurman, Simian Psychometric Enhancement Technician at Nansen, said that for all technology related to cryptocurrencies and stablecoins, it all still hinges on humans. Decryption.
“Algorithmic stablecoins often have built-in stabilization mechanisms, but the main driving force behind pegs is often community trust that algorithmic stablecoins can be redeemed for $1,” he said. said. “If enough people lose faith in the peg…they will choose to trade algorithmic stability at a haircut rate to keep their assets further away from the peg.”
thurman is his company analysis of the collapse of the UST overturned by the loss of collective trust from so-called whales.